Gary Klicpera & Jeffrey Greer

Gary Klicpera & Jeffrey Greer

What are Contingencies on a C ontract?

Sep 04, 2018

Real Estate

Contingencies are commonplace in contracts of all kinds. A contingency allows for one party or another to legally back out of a contract in the event of some specific condition occurring.They are protection against the unknown. In real estate, there can be contingencies inserted for either buyer or seller or both. These take many different forms and until removed in writing, either party may change their minds based on the result of the contingent event or issue. Some examples of home buyer contingencies:

Home inspections – condition of the home

Specialty inspections – mold, geological, roof inspections

Code Violations – an investigation into improvements made without permits

Lender appraisal – ensures the offered price is not too high

Sale of current home – allows the buyer to back out if they cannot sell their current home in specific time frame

Final loan approval – loan is ready for signature and close

HOA CC&Rs – review of documents to ensure rules and regulations do not infringe on enjoyment of property

Insurability – home owner’s insurance available at a reasonable rate

Home sellers can also have contingencies included as well, such as one which states the sale is contingent on finding a replacement home. Contingencies are a fact of contract law. In real estate, they ensure that the offer is concluded as expected.

The property information herein is derived from various sources that may include, but not be limited to, county records and the Multiple Listing Service and it may include approximations. Although the information is believed to be accurate, it is not warranted and you should not rely upon it without personal verification.